Carney Curbs Expectations
Carney and Hammond Double Act
Yesterday at Mansion house, we were treated to two speeches early in the morning. Firstly we had the Chancellor of The Exchequer Philip Hammond, who outlined his view that Brexit should very much focus on the economy and that “Nobody voted for Brexit to become poorer” rather than sovereignty or immigration. This may rub some other party members up the wrong way and could be a re-occurring theme during negotiations. Any signs of discord in the Conservative camp will be jumped on by the press and opposition of course.
Meanwhile, Mark Carney The Governor of The Bank of England seemingly stymied any chance of a near term interest rate hike in the UK, which had the obvious effect of weakening Sterling significantly against a host of major currencies. He made a clear point regarding “weaker real income growth”, which he also mentioned during a BofE press conference recently to re-iterate his thought process on where rates should be during this unstable period.
Carney went on further to talk about an “innovative, co-operative and responsible” approach to Brexit to ensure everyone is working together on the same goal, perhaps an undertone of where he hopes Euro clearing will remain in future. Carney’s preference for a soft Brexit was made very clear as like the Chancellor he hopes for a slope at the end of negotiations rather than a cliff Edge.
EU Negotiations Continue
Whilst The Great Repeal Bill has set out plans to stick to existing EU Rules and Laws whilst new arrangements are made post Brexit, Barnier has warned that EU Judges will ensure the rules are stuck to during this period. A further warning perhaps that there will be few concessions from the Europeans.
Another subplot in the EU is the IMF’s request that EU creditors give Greece further debt relief to help make their debt more sustainable, this may roll on for a very long time.
The state opening of Parliament is today as the Queen reads the government’s speech, thought to be focusing on Brexit. The speech has been shrouded in controversy as the DUP warn that they should not be taken for granted in agreeing a deal with the Conservatives, which is certainly not the best start to a new term.
PM Theresa May is said to state she will work with “humility and resolve”, which many take as her having to scale back large parts of her manifesto to please the electorate. Political opposition are of course writing their own versions of the speech, so it will be worth keeping an eye out for any surprises or early concessions.
With limited economic data released once more today keep an eye out for key speakers again.